Welcome to your pension

Transcription

1 For customers Welcome to your pension

2 We re pleased to welcome you to your pension plan and to Aegon We ve been helping our customers with their pensions for over 180 years and, with over 34,000 company pension schemes, we know that putting our customers at the heart of everything we do is what matters. That s one of the reasons why we ve put together this welcome pack. To help you find the information that you might need now or in the future. This booklet gives you important information about your pension plan, including your policy. You ll also get a policy schedule(s), confirming specific details of your plan(s). You should read this booklet and check that the details in your policy schedule(s) are correct. If you have questions, please contact your GPP scheme adviser or you can call us on To help make managing your pension plan as simple as possible, we ve included a section called Pension choices when life changes. This gives you some examples of things that might happen to you throughout the lifetime of your plan, such as leaving your company or making a change in your contributions. We ll also be in touch every year to send you a statement of your account. One of the benefits of having a pension plan with us is that you can access and manage it online. You ll receive a separate letter telling you how to register for our online services. It s quick and easy to do, and once you re up and running you can, for example: see how much money you have in your plan; see the funds your money s invested in, how they re performing and their current prices; check your contribution history; update any of your personal details; and move investments between different funds (you should speak to the scheme adviser or a financial adviser before you do this). If you have any questions about your plan now or in the future, you ll find our contact details in the How to get in touch section. When you call us, please have your plan number to hand so we can help you with your enquiry as quickly as possible. You should complete a Death benefits nomination form. It s important you complete this and send it back to us as a record of your expression of wish. If you haven t received this form you can download it from aegon.co.uk, print it out, complete it and send it in to us at the address in the How to get in touch section of this booklet. Alternatively you can call us and we ll send you a form directly. If you want to change these details at a later date, please follow the same process. Page 2 of 44

3 Pension choices when life changes 04 Answers to some common questions How to get in touch 06 Contact details for our team How to get advice or make a complaint 07 Policy conditions 08 Legal terms and conditions of your plan 03 Page 3 of 44

4 Pension choices when life changes Here are some of the everyday questions we hear from our customers. 1. I have a pension elsewhere, what can I do? If you have pension benefits with other companies or previous employers, it may be possible to transfer these into your plan. In this way, you can combine all your retirement nest eggs in one place (this is called consolidation). If you do decide to transfer your benefits, and of course you don t have to, you should think about what you may be giving up under your existing arrangement. You should check the terms and conditions of your existing arrangement and compare them with your new arrangement before moving your benefits. However, you should get professional financial advice before making this decision as your investment and benefit options will vary from plan to plan. 2. I ve left my company and started a new job. What can I do with my old company pension plan? Even if you change employer, you can still keep your plan with us by converting your group plan to an individual plan. In most cases you also have the option to transfer your benefits to your new employer s pension scheme. However, you should discuss all of your options with a financial adviser. 3. I ve just been made redundant what can I do with my company pension plan? If your financial situation changes, you ll have a number of options relating to your company pension plan. As you ve left your company pension plan, you could convert your group plan to an individual one. You might decide to reduce your monthly contributions, or even take a payment holiday until you can afford to continue making payments. (Although stopping or reducing payments can affect your final pension pot). If you join a new company, your new employer may be prepared to pay to your pension plan or you may be able to transfer your benefits to your new employer s pension scheme. Our team can explain these options in more detail, but we recommend discussing them with a financial adviser. 4. I don t have a financial adviser but would like some more details about what they could help me with and how much they cost. Where can I get this information? Your employer may have appointed an adviser or, if you visit unbiased.co.uk there s a simple questionnaire to fill out. Once you ve completed this, you ll be sent a list of independent financial advisers in your area that meet the requirements you entered. Anyone can access a financial adviser s services, and if you contact them directly they can give you more details about what they can offer and how much they charge. 5. I ve been promoted and have some extra income. Can I increase my monthly contributions? You can review and increase your contributions at any time. You should speak to your employer to find out more about the options available under your group plan. 6. Can I change some of the funds I m invested in? As your circumstances change, you may want to change your fund choice (known as switching). You can do this any time, normally free of charge see section 7.4 in your policy conditions for more information. To switch funds, you can contact us directly, or visit aegon.co.uk/funds/switch-funds/index. htm and use our online services. You can find details of what online services can do for you in the Welcome section on page 2. You should get professional financial help if you need any fund switching advice. 7. I want to see what my pension plan is worth. How do I do this? We ll send you yearly statements showing you details of your plan. You can also access our online services at any time to check how your plan is doing. These are explained in more detail on page 2. Alternatively, you can call or our team for information (it s helpful if you have your plan number to hand when you phone). You can find our contact details in the How to get in touch section on page 6. Page 4 of 44

5 8. When and how can I draw my pension? You can take benefits from your plan at any time between the ages of 55 and 75 (including while you re still working) and earlier if you are in ill health. If you don t want to take your benefits before age 75, you can transfer the value of your plan to another plan and choose to remain invested. You should speak to a professional financial adviser before you reach age 75 if this is something you re considering. You should remember that your plan has been designed to provide you with an income in retirement. You can also usually take a tax-free cash lump sum of up to 25% of your pot. If you take some of your benefits early, you should consider the effect this might have on your retirement income. 9. Can I cash in the whole of my plan early? This may be possible, subject to the tax rules that apply at the time. For example, if you re in ill-health, you can take benefits before age 55. If you need to discuss this with us, please contact one of our team. You ll find our address details in the How to get in touch section on page Can I change the retirement date of my plan? Yes you don t need to take your benefits at your retirement date. Subject to the age restrictions detailed in question 8, you can alter the plan retirement age at any stage. If you decide to do this, you should contact us and we ll give you more details about your options. You ll find our address details in the How to get in touch section on page 6. We re here to help you, but we can t give you any direct financial advice. If you need this, you should speak to a financial adviser. You may have to pay for this advice. Page 5 of 44

6 How to get in touch We re always happy to hear from you. Customer helpdesk If you have any questions about your employer s scheme or your plan, please make a note of your scheme/plan number and call us on: You can also us at: enquiries@aegon.co.uk Financial advice We ll be happy to give you information about your plan and the options open to you, but we can t give you any financial advice. If you need advice on contribution levels, transfers, investment decisions or cashing in your plan, please speak to your scheme adviser. Your employer may have appointed an adviser or, if you don t have an adviser, you can find one in your area by going to: unbiased.co.uk In writing and online If you d like any more information about the scheme, you can ask for this by writing to: The Scheme Administrator Aegon Edinburgh Park Edinburgh EH12 9SE Or you can find out more on our website: aegon.co.uk Page 6 of 44

7 How to get advice or make a complaint Our aim is to provide a quality service for you. We hope that if you do have a problem with our service, we can resolve the matter for you. However, if you re still not happy with our response, there are organisations that may be able to help you: The Pensions Advisory Service The Pensions Advisory Service is available to help members and beneficiaries of schemes with difficulties which they can t resolve with the scheme administrator. You can get in touch at: The Pensions Advisory Service 11 Belgrave Road London SW1V 1RB The Pensions Ombudsman If you have a complaint or dispute against a pension scheme, you can contact The Pensions Ombudsman at the same address, clearly marking it for the attention of The Pensions Ombudsman. In most cases, you should address any complaint to the Pensions Advisory Service first. The Financial Ombudsman Service (FOS) We re covered by the FOS, so you can contact them if you have any complaints that we can t settle. You can get in touch at: The Financial Ombudsman Service Exchange Tower London E14 9SR Referring the matter to either ombudsman service won t affect your right to take legal action later on. Compensation Your plan with us is covered by the Financial Services Compensation Scheme (FSCS). As such, you (or your beneficiaries, as appropriate) may be entitled to compensation from the FSCS, if we can t meet our obligations. This depends on the type of business and the circumstances of the claim. Further information is available from: Financial Services Compensation Scheme 10th Floor Beaufort House 15 St Botolph Street London EC3A 7QU or fscs.org.uk Page 7 of 44

8 Policy conditions Introduction This booklet includes details that are appropriate for a range of group personal pension, group selfinvested and group stakeholder plans, which we call GPP in this booklet. We confirm the version number for your GPP in your policy schedule, for example GPP V9, GSIPP V13A or GSH V12A, or may confirm this separately if there s any need to change the terms of your policy. You may have joined your GPP with Aegon voluntarily, or your employer may have enrolled you in the GPP. In either case, you have a contract or contracts with Aegon. The terms set out in this booklet, your policy schedule(s), and anything we send you changing your contract, explain your contract. Each policy that we confirm in your policy schedule(s) is a separate contract. This booklet sets out details that apply for policies coded: We may change the terms of your policy from time to time, as set out in section 3 on page 12. You will be able to get a copy of the current version of your policy booklet from our website aegon.co.uk GPP V15 GPP V13B GPP V13A GPP V12A GPP V10A GSH V12A GSH V10A PP9 PP8 PP V8A PP V8B PP7 PP V7 PP V7A PP V7B PP6 PP5 PP4 PP3 PP2 PP1 PP1A PP1B PP 9M3 PP 9M2 PP 9S3 PP 9S2 PP 9S1 PP 9M1 PP SP1 PP SH1 PP SC2 PP SC1 GSIPP V13B GSIPP V13A GSIPP V12A GSIPP V10A Page 8 of 44

9 Contents Conditions of membership Definitions and interpretation Overriding provisions Changes to your policy Contributions The investment funds Valuing investment funds and working out unit prices Switching investments Liabilities and expenses of the investment funds Deferring the cancellation of units Death before taking benefits Transfer Taking benefits/retirement Fund adjuster Fund value rebate Charges Overseas aspect Written communications Applicable law Evidence of age and other information Miscellaneous Termination 33 Waiver of contribution benefit policy Definitions and interpretation Overriding provisions Discretionary powers Evidence of health and other information Charges and changing the terms of your waiver policy Benefits Temporary breaks in incapacity Evidence of incapacity Alternative occupations Exclusions Missing contributions and suspension of waiver benefit Units secured by benefit contributions Miscellaneous Evidence of health 43 Page 9 of 44

10 Conditions of membership Contributions The scheme can accept personal contributions paid by you, your GPP employer (or by someone else on your behalf). You and your employer can make single or regular contributions. Tax relief is available on contributions, but may be restricted if contributions over the annual allowance (the limit set by the Government) are paid. Under current tax legislation, a contribution will be eligible for tax relief provided it s paid when you re under age 75, and you re a relevant UK individual (broadly, subject to UK tax) for the tax year in which it s paid. If your GPP employer arranged for you to be auto-enrolled into the GPP, there are legal minimum contribution requirements applying to the total contributions and employer contributions. These minimum contribution requirements mean that you may be required to contribute to the GPP (to meet the minimum). Contributions and transfer payments will be applied to an individual policy or policies as described in this booklet and in other material we give you. You can also get details from our website. This booklet also includes the terms for a separate waiver of contribution benefit policy which you may take out with Aegon. You ll get a policy schedule confirming waiver of contribution benefit details if this also applies for you. HMRC rules on tax relief on your contributions Where you applied to join the GPP, you will have given a declaration as part of the joining process confirming you meet HMRC rules. This declaration is that: your total contributions to all UK registered pension schemes (schemes that attract tax relief) will not be greater than: a. your relevant earnings (broadly UK taxable earnings directly from a trade, or profession or employment); and b. 3,600, if your relevant earnings are less than 3,600. if you move out of the UK, for tax purposes or lose eligibility for tax relief on any contributions that you pay to the GPP (because your earnings have reduced), you will confirm this to us before the later of: a. 30 days after the change; and b. the 5 April at the end of the tax year when your circumstances change. If your GPP employer arranged for you to be autoenrolled into the GPP, HMRC rules require your GPP employer to give this declaration on your behalf. Your GPP employer must confirm that the details they give us to set up your GPP are correct. You should check information that we send you, to ensure that all of your personal details are correct and contact us or your GPP employer if there s anything wrong in your personal details shown in your policy schedule. The declaration from you, or on your behalf, also means that HMRC rules require you to check: that you are not breaching the limits on contributions qualifying for tax relief set by HMRC; and if you move out of the UK, you tell us as soon as possible. You should keep all the information that we give you about your GPP together in a safe place. Please remember to tell us if you change your name or move house, so that we can help ensure that you don t lose track of your GPP. Page 10 of 44

11 1. Definitions and interpretation The following words and expressions have the meanings as set out below: Aegon is a brand name of Scottish Equitable plc. allotted unit means a unit which has been allocated or deemed to be allocated, and which has not been cancelled or deemed to be cancelled. business day means any day which is a trading day on the London Stock Exchange. deed means the deed or declaration of trust establishing the scheme and any amendment or modification to it that is made at any time. If you ask us for a copy of the deed, we will give you the version that applies at that time. dependant means: your spouse, civil partner and/or children under the age of 23; anyone who was, in our opinion, financially dependent or interdependent on you at the date of your death; or anyone who was, in our opinion, dependent on you because of physical or mental impairment at the date of your death. due date is the day of each month (or year, if regular contributions are payable on a yearly basis), as chosen by your GPP employer when regular contributions will be paid to your policy. There is more information on this in section 4.2. earnings-related contributions means contributions that are calculated as a percentage of your earnings, as determined by and agreed with your GPP employer. GPP is the group personal pension scheme, group self- invested scheme or group stakeholder scheme that this policy relates to, as confirmed in your policy schedule. GPP employer means your employer, being the employer who arranged for the GPP (and confirmed in your policy schedule). HMRC means Her Majesty s Revenue & Customs. increase rate means the increase (if any) specified in your policy schedule as the rate for increases in regular contributions. index means the index taken from the figures in the Actual column under the heading Whole Economy in the Average Weekly Earnings Index (the KA5Q table), published by the UK Government (the Office for National Statistics). If the UK Government stops publishing this index, or we decide that it is no longer suitable, we will use another index. The replacement index will either be one published by the Government or calculated by us. investment fund is a fund in the range available for investing contributions and transfer amounts paid to your policy, as detailed in section 5. managed fund company means Aegon and/ or such other person and/or company (including Aegon) as Aegon may from time to time determine. member means you, the member, named in your policy schedule. member contributions are the contributions that you personally pay to your GPP as regular contributions and single contributions, or any contributions that somebody else pays on your behalf as member contributions. pension date is confirmed in your policy schedule and is the date your GPP employer set as being appropriate for your policy for the purposes of estimating benefits and, possibly, fixing certain terms as described in this booklet. You can ask us to change the pension date (before you reach the pension date confirmed in your policy schedule) if, for example, you do not intend to take benefits and will want to continue contributions after the pension date confirmed in your policy schedule. pension starting date means the date selected under section policy means your GPP contract with us, and is made up of: this policy booklet (we confirm the code number of your policy in your policy schedule); your policy schedule; where an adviser or consultancy charge applies to your policy (as described in section 15.5), our Adviser/consultancy charge terms and conditions leaflet; and any additional document referred to in this booklet, your policy schedule or the Adviser/ consultancy charge terms and conditions. policy schedule means the document called policy schedule or plan schedule that we send you with this booklet or any additional or replacement information that we send you later. This could be in the form of a replacement schedule or we may tell you specifically that a letter or document we send you confirms a change to your policy terms. We will confirm the policy or plan number(s) that apply to your policy in your policy schedule. policy year means the period of one year from the starting date and each period of a year after that. regular contribution means a regular payment that you, someone on your behalf or your employer pay to your policy. RPI means the retail prices index as published by the UK Government (the Office for National Statistics). If the UK Government stops publishing this index, or we decide that it is no longer suitable, we will use another index. The replacement index will either be one published by the Government or calculated by us. Page 11 of 44

12 rules mean the rules of the scheme and any amendment or modification to them that is made at any time and from time to time. If you ask us for a copy of the rules, we will give you the version that applies at that time. You can also get a copy from our website. scheme means the Scottish Equitable Personal Pension Scheme, the Scottish Equitable Selfadministered Personal Pension Scheme or the Scottish Equitable Stakeholder Scheme, as confirmed in your policy schedule. Your GPP is provided under the scheme. scheme adviser means the adviser appointed by your GPP employer. single contribution means a one-off payment that you, someone on your behalf or your employer pay to your policy. smoothing adjustment is described in section smoothed value is described in section starting date is set out in your policy schedule. It means the date when your policy started. transfer amount means any transfer payment made to the scheme from any source allowed by the rules. unit in relation to an investment fund means one of the units into which the fund is divided. Where the context permits, unit includes a fraction of a unit, but does not include a unit which has been cancelled. unit price in relation to a whole unit of an investment fund means the unit price calculated in line with sections 4.10 and 5.7 for the with-profits funds. with-profits funds means the With-Profits Growth Fund and the With-Profits Cautious Fund. We describe how these funds work in section Overriding provisions 2.1 The terms of your policy including: the payment of regular contributions, single contributions and transfer amounts to your policy; and the benefits paid from your policy are subject to being allowed by the rules. 2.2 No term of your policy will override or take precedence over any provision of the deed and rules unless we tell you that a term of your policy is to override or take precedence over a provision of the deed and rules. 2.3 We must comply with any court orders we get in respect of your GPP (for example, as a result of a pension sharing order as part of a divorce settlement or on dissolution of a civil partnership). 2.4 If you leave the GPP employer or decide to leave the GPP, we will give you more details on how this affects your policy at that time, but: you may continue regular contributions and pay single contributions to your policy outside the GPP by arranging this direct with us; or you can stop all payments to the policy see section Subject to the terms set out in section 3, we may impose minimum contribution requirements and change these from time to time. You can ask us at any time what the current minimum requirements are and we will tell you if your policy is affected by any change to the minimum contribution requirements. 3. Changes to your policy We can make some changes to your policy without your agreement (or, if applicable, without the agreement of some other person to whom a benefit is being paid, for example your dependant). We can make changes to your policy from time to time in a reasonable and proportionate manner where it is necessary or prudent to do so. This could be without your agreement and may include, for example: where we consider it will make your policy easier to understand or fairer to you; to allow us to provide an improved, more efficient or lower-cost service to you; to reflect market conditions and general industry practice; to reflect any changes to the costs we face in providing services to you; because of changes in the way we do business; to take account of any changes to legislation, codes of practice or regulations and to take account of any decisions made by a court, ombudsman, regulator or similar body; or because of changes in technology. We will only use our discretion to vary your policy terms in a reasonable manner and would normally only do so where we give you notice. We will give you at least 30 days notice of the change, unless this is not practical or would result in us being unable to comply with legal or regulatory changes or is not possible, in which case we will give you as much notice as we can. You have the right to terminate your policy at any time. If you want to do so following variation of the policy terms, termination will be subject to the terms set out in section 11 or 12. Page 12 of 44

13 4. Contributions 4.1 Types of contributions a. The contributions which may be paid to your policy are as follows: regular contributions and after the starting date, subject to our agreement; single contributions; and transfer amounts. Your GPP employer will deduct your regular contributions after the allowance for the basic rate tax adjustment from your pay. Subject to section 4.1.c, contribution rates and transfer amounts paid to your policy will be confirmed in your policy schedule(s). Your regular contributions, your single contributions or any paid on your behalf as member contributions, will be shown in your policy schedule as the rates that apply before allowance for any basic rate tax relief on your contributions see section 4.3. Regular contributions may be calculated as a percentage of your pensionable earnings or, subject to our agreement, automatically increase in line with the increase rate. If this applies, the percentage rates of the increase rate will be confirmed in your policy schedule. b. GPP used as an auto-enrolment scheme Your GPP employer may use the scheme to meet their legal requirements to ensure that certain people are enrolled automatically into a pension scheme meeting the Government s requirements on saving for retirement ( autoenrolment or using the pension scheme as a qualifying scheme ). Your employer must arrange for you to be told where your GPP is to be used as an autoenrolment or qualifying scheme ( the autoenrolment rules ). Using the GPP to meet the auto-enrolment rules is subject to our agreement. However, we reserve the right to give your GPP employer notice that the GPP, or any part of it, may no longer be used to meet the auto-enrolment rules. We would do this only if, in our view, we can no longer operate the GPP on a basis that is commercially acceptable to Aegon, for example: if the Government changes the autoenrolment rules; or there is a significant reduction in the average monthly contribution for members of your GPP. If we decided that we can no longer offer the GPP, or part of the GPP, in a way that will meet the auto-enrolment rules, we will give your GPP employer notice. This notice will, in our view, allow your employer sufficient time (normally at least 3 months) to arrange for membership of another scheme that meets the auto-enrolment rules. In these circumstances: your GPP employer would be responsible for giving you details of the new scheme to apply; and we would give you details of your options in relation to your policy (as set out in sections 2.4, 11 and 12) and any revised charges in terms of sections 13 to 15. Where the auto-enrolment rules apply, certain legal requirements must be met: i. Maximum charges There is a charges cap that applies to default investment strategies (see section 4.9.2) for plans being used after 5 April 2015 to meet auto-enrolment rules. The total charges, as described in sections 13 to 15, applied to your GPP must then not be greater than the charges cap limit set by the Government. Higher charges can apply where you choose investments in funds other than the default investment strategy. We offer a range of funds: for use as default investment strategies and may change this range from time to time (see section 4.9.2); what we call compliant funds ; and other funds designed for active investors where charges are above the charges cap. An important feature of the funds we offer as default and compliant funds is that, your policy will be protected by the charges cap while invested in these funds. We can confirm this because we monitor and control the expenses for these funds. If you re not fully invested in our default or compliant funds, you won t be protected by the charge cap (as we don t control those other funds expenses). You can get more information about our funds at aegon.co.uk/funds The charges cap does not apply to: what the Government call transaction costs that is the additional expenses that fund managers pay when buying and selling stocks and shares in a fund; and to some other costs that may apply on a one-off basis, such as for implementing a court order, for example a divorce pension sharing order. If any charge needs to be covered separately (met from your policy or, possibly, by a separate payment), we would tell you before applying the charge. Page 13 of 44

14 ii. Employer fee Where we believe that the charges cap does not allow us to offer the GPP on a commercially acceptable basis, we may give conditional agreement to the GPP being used, or continuing to be used, to meet autoenrolment rules. Our conditional agreement, in these circumstances, will be subject to the GPP employer meeting a separate monthly fee payable for the GPP. If your GPP employer agrees to this separate fee, this will offset the charges that we would otherwise apply to your policy. If your GPP employer then decides not to pay or stops paying the employer fee: your GPP would no longer meet the autoenrolment rules; and we reserve the right to stop taking contributions to your policy or to increase the charges, as set out in section 3. iii. Minimum contributions Where a scheme is used to meet autoenrolment rules, minimum contribution rates apply to the total of employer and employee contributions that must be paid. There is also a separate minimum for employers as part of the total minimum. The minimum contributions mean that you may be required to contribute the difference between the employer minimum and the total minimum to your policy. For example, say: the Government set the total minimum contribution rate at 5% of pensionable earnings; and the employer minimum at 2%. If the employer pays the 2%, the minimum rate for employees would be 3% in this example. (This 3% would be reduced by the basic rate tax relief applying at the time.) If the employer agrees to pay, say 4%, the minimum rate for employees would be 1% (again reduced by the basic rate tax relief). c. If contributions to your policy are affected by the minimum contribution requirements set by the Government in future, contribution rates to your policy will be increased automatically (unless you opt-out of the increase). We may not send you a replacement policy schedule when contribution rates are increased to meet the minimum requirements set by the Government. You can get more information about the minimum contribution requirements set by the Government from our website or from the scheme adviser. 4.2 Payment dates for regular contributions a. Regular contributions are payable: on the due date set out in your policy schedule, subject only to b below; on a monthly or yearly basis, as confirmed in your policy schedule; and on each due date up to your pension date or, if earlier, the date when we pay all benefits from your policy. b. Where your GPP employer arranges for you to be auto-enrolled into the GPP (as described in section 4.1.b), you will have one month to arrange to opt-out (to be treated as never having joined). During that one month opt-out window, your GPP employer will deduct your regular contributions (if any) from your pay, but will not pass these to us, for investment, until after the end of your opt-out window. This approach is consistent with what is allowed in legislation and means that, for anyone who chooses to opt-out in that initial opt-out window, regular contributions can be more readily refunded without any risk of changes in the value of the regular contributions paid. It also means that there is an initial delay in investing contributions during that initial opt-out window for anyone who does not opt-out. As such, if you are auto-enrolled, the first regular contributions to your policy will not be invested before the due date after the end of your opt-out window. 4.3 Tax relief When a regular contribution or single contribution is paid as a member contribution, it is paid after deduction of the basic rate of income tax that applies when we receive the contribution. We will apply the regular contribution or single contribution to your policy as if no tax deduction had been made. We will then claim the amount of tax deducted from HMRC. We will retain any amount recovered for our own use. If we cannot recover the full amount of the tax deducted from HMRC, having taken reasonable steps to make the recovery, we will cancel units to the value of the amount HMRC would not repay. We will cancel units at unit price proportionately from each investment fund in which the regular contribution or single contribution is invested (and retain the proceeds for our own use). The number of units that we will cancel will be what we require to cover the full amount of tax up to the level that we could not recover. If the cash-in value of the applicable units is less than the tax that we could not recover (because of a fall in the value of units since the contribution was invested) we will cancel units proportionately from each investment fund in which units under the policy are invested. In this way, we will recover the full amount of the unrecovered tax deducted (and retain the proceeds for our own use). Page 14 of 44

15 4.4 Payments from a waiver policy Contributions may be paid to your policy by an insurer under a policy or contract of insurance (a waiver policy ) which provides for payments to continue to be made where you are unable to pay contributions because of long-term illness, injury or incapacity. Where this happens, the payments from the waiver policy will be treated as if they had been paid by you, so treated as member contributions, to your policy. As far as is reasonable, we will apply the payments to your policy to reflect the contribution provisions in force immediately before payment from the waiver policy starts. We may agree to do something different at your written request and, where another insurer is involved, if the other insurer agrees. Where another insurer is providing the payments, we will accept these in good faith and will not need to be aware of the provisions of the other policy and/or to check that the payments from the other insurer are of the right amount or are made on time. 4.5 Latest dates for payments to your policy Regular contributions, single contributions and transfer amounts must stop no later than: the day before your 75th birthday; the day before the date of your death; the day before the day that you take all benefits from your policy as described in section 12; the day before your pension starting date; the day before all of the benefits under your policy are transferred out in terms of section 11; and such later date that we may agree. 4.6 Contribution increases and reductions If you want to alter your regular contributions, you should contact your GPP employer to ask for the change. Your GPP employer may apply restrictions on how contributions can be varied. If you decide to reduce or stop contributions, your GPP employer may also reduce or stop any GPP employer regular contributions to your policy. Any restrictions on reducing your contributions will normally be detailed in your contract of employment. Your GPP employer will confirm any change in regular contributions to us. You may apply to us to pay single contributions after the starting date. We will accept these payments unless there is a reason why we cannot. If we cannot accept a payment, we will tell you the reason. We may also impose minimum requirements on the amount of regular contributions, single contributions and transfer amounts that we are prepared to accept. You can ask us to confirm the minimum levels (if any) that we currently apply and details will be published on our website. If your policy is coded PP2 - PP9, we may apply a special charge where regular contributions are reduced and not restored or restarted (a paid-up charge ). You can ask us for a copy of the leaflet setting out when a paid-up charge will apply and how we will calculate this, or get a copy from our website. 4.7 Paying contributions and transfer amounts All contributions and transfer amounts must be in UK pounds sterling (or in any other currency that we may confirm is acceptable) Your GPP employer pays regular contributions direct to us. We treat each regular contribution as being paid on the due date unless or until there is any problem with the payment process The date we treat a single contribution or transfer amount as paid is the starting date set out in your policy schedule, or in another document that we send you relating to that single contribution or transfer amount. 4.8 Allocation rates Payments to the policy will be allocated as set out below Proportion Invested The proportion of any contribution or transfer amount to be invested in your policy is the amount of the contribution multiplied by: 100%; or the percentage rate confirmed in your policy schedule as the proportion to be invested and relating to the contribution or the transfer amount Allocating units Subject to section 4.9 and the provisions set out in this paragraph, you can choose the investment funds and the proportion of contributions or transfer amounts for investing in each investment fund. All regular contributions and all allotted units relating to regular contributions must be invested, at any given time, in one investment fund or in the same combination of investment funds. We may require minimum amounts for investment in or transfer from any investment fund. You can get details from our website or ask us to confirm the current minimum levels. You can ask us to change the investment selection for your policy. See section 7 for more information on changing investments. Page 15 of 44

16 4.8.3 Changing your pension date We, or the fund manager, may fix the unit price by reference to your pension date. Where you ask us to alter your pension date, and we agree, we may calculate the unit price as if your revised pension date had been the pension date that applied at the starting date. 4.9 Investing contributions You may choose the investment funds to be used and the proportion of contributions and transfer amounts to be invested in each investment fund from the starting date of your policy. Alternatively, your GPP employer (normally on advice from the scheme adviser) may confirm a default investment strategy or a default fund to apply to your policy. In any event, we will confirm the investment funds applying for contributions and transfer amounts in your policy schedule(s) or in other material that we send to you. (There is more information on the operation of investment funds available for your policy in section 5.) Default investment strategy or a default fund If a default investment strategy or a default fund applies for your policy, we will confirm this in your policy schedule, and the following applies. a. All contributions and transfer amounts will be automatically invested in the default investment strategy or in the default fund. b. You may instead choose the investment funds to be used and the proportion of contributions and transfer amounts to be invested in each investment fund. However, if your GPP employer autoenrolled you in the GPP (as described in section 4.1.b) you cannot change investment fund(s) until after you have this booklet and your policy schedule. c. Additional provisions relating to the operation of the default investment strategy are set out in section Default investment strategy a. If your GPP employer arranged for you to be auto-enrolled in the GPP (as described in section 4.1.b) we will treat you as a default fund investor. While you are a default fund investor: you will not be required to make any investment choices, and regular contributions and any transfer amounts will be invested following the default investment strategy; and if/when your GPP employer or scheme adviser confirms any change to the default investment strategy, the change will be applied automatically to your policy. You will get details of the change at the time. b. If you give us a specific investment instruction for any single contribution or transfer amount, or to change any existing investment, you will no longer be treated as a default fund investor No default investment strategy or default fund When you choose the investment funds to apply for your policy, you must make a clear and complete selection of the investment funds and the proportion to be invested in each. If we accept that you have made a clear selection, we will apply the contributions and transfer amounts, in accordance with your instructions. If we consider that you have not made a clear selection, we will confirm this to you and apply the terms set out in our Investment fund allocation procedure. We may update our Investment fund allocation procedure from time to time. You can get a copy of the current Investment fund allocation procedure from our website, or you can ask us for a copy. If you ask us for a copy of the Investment fund allocation procedure, we will give you the version that applies to your policy at that time Repayment If we are to make a repayment of contributions (for example, because the rules require it), the following apply. a. We will cancel allotted units up to the value of the amount to be repaid, as set out in our Investment fund cancellation procedure (see section ). b. The amount to be repaid will be the amount raised by cancelling units as set out above. c. We will then, normally, repay to your GPP employer unless the payment related to member contributions and you have already left your GPP employer. Page 16 of 44

17 4.10 Investment fund allocation procedure and Investment fund cancellation procedure Investment fund allocation procedure After we treat a contribution or transfer amount as paid, we will apply the payment to the relevant investment fund(s) as described in section 4.9. We will calculate the number of units of the relevant investment funds, to apply to your policy in accordance with our current Investment fund allocation procedure Investment fund cancellation procedure Our Investment fund cancellation procedure is our guide that sets out the procedure we use for making payments when benefits are to be taken or transferred from your policy Arrangements a. Unless we tell you otherwise, your policy will be set up as one arrangement. b. Where you ask for a transfer from the scheme of just part of your policy, we may agree to split the arrangement in two. The first will cover the amount that you want transferred out of your policy. The remainder of your policy will be a second arrangement. Any such amendment will have effect from immediately before the time when the transfer payment is to be made. Our payment of the transfer will be evidence that the arrangement has been altered as outlined above Parts of regular contributions If your policy schedule does not refer to parts, your regular contributions have not been classified this way. If your policy schedule does refer to parts, the following will apply. A part is identified by referring to the first application or GPP employer confirmation to pay regular contributions. The first application or GPP employer confirmation will describe the amount and term over which those regular contributions will be paid. All payments of regular contributions up to and including the amount noted in that application or GPP employer confirmation will be considered as a part of a regular contribution. The amount here and in the rest of this section includes any increase that may apply under 4.1. A later application or GPP employer confirmation may set out details of further amounts of regular contributions which will be made. Any payment of regular contribution which is an amount more than the amount under the previous part will be considered to be another part. We will number each part in ascending order. The first part will be part 1, and subsequent parts being numbered as 2, 3, and so on. If the amount paid as an instalment of regular contribution is less than the amount expected, we will apply the reduced amount to the lowest numbered part first and from then on to the next lowest numbered part and so on. In doing so, we will take account of any increases that have been applied to a part as set out above in this section Deemed creation, cancellation and allocation of units We do not actually have to create or cancel any units of any investment fund, or to allocate any units to your policy. Instead, we may deem these units as having been created, cancelled or allocated. This is for accounting purposes on our computer systems. The unit price of these deemed units will be the same as the unit price of the actual units at the relevant times. Where we refer to the creation, cancellation or allocation of any units, this includes the deemed (or notional) creation, cancellation or allocation of these units. 5. The investment funds 5.1 The investment funds will consist of any investment funds that we agree are available to your policy. If you want to see a description of the investment funds, you can get one from our head office or from our website. 5.2 Some information on how we operate the investment funds is set out in sections 5.3 to 5.8. Additional terms apply to certain investment funds. These are described in our description of the investment funds mentioned in section 5.1. There is some information on the with-profits funds in section Our powers relating to the investment funds Regardless of the name and description of each of the investment funds, and where UK law allows, we have certain powers including: a. buy and hold, for the investment funds, investments and assets of any kind; b. borrow money for any of the investment funds; and c. use as security any asset of the investment funds. 5.4 Closing and winding up an investment fund a. During the lifetime of your policy we may need to close, wind up or remove investment funds for a variety of reasons. When we decide to close, wind up or remove an investment fund, we will act reasonably and take account of all our policyholders interests. The reasons for closing, winding up or removing an investment fund may include but are not limited to: Page 17 of 44

18 the manager of the underlying investment fund tells us that the underlying investment fund is to close; it is no longer cost effective to keep the investment fund open; we consider that for investment funds of a small size the total cost of the investment fund is too high for policyholders; we are told about a change in management approach or corporate strategy by the manager, or a change in manager of the underlying investment fund that we reasonably believe may impact on the ability to manage the underlying investment fund in accordance with our objective; we think that the investment fund may not be able to meet its objectives in future; responding to underlying investment fund manager changes; operational constraints such as a failure to meet minimum investment fund size or change to operational complexity; and investment funds may close, merge or change as a result of our commercial or strategic decisions. b. For the purposes of this condition an underlying investment fund means an external investment fund in which our investment fund is invested Closing an investment fund a. We have the right to close an investment fund. If you hold units in that investment fund, we will normally give you at least 60 days notice that we are going to do this. However, where the underlying reason for closing the investment fund is outside of our control and means that we are unable to give you this amount of notice, we will tell you as soon as reasonably practicable. b. We will not issue any further units in an investment fund that is closed but it will continue to exist until it is wound up or the last of its units is cancelled. c. Until we wind up an investment fund that is closed, or the last of its units is cancelled, we may re-open that investment fund. If you hold units in that investment fund, we will tell you that we have done this Winding up an investment fund a. We have the right to wind up an investment fund. If you hold units in that investment fund, we will give you at least 60 days notice that we are going to do this. However, where the underlying reason for closing the investment fund is outside of our control and means that we are unable to give you this amount of notice, we will tell you as soon as reasonably practicable. b. When we are in the process of winding up an investment fund, we will either: sell the assets of the investment fund; or transfer the assets of the investment fund to another investment fund(s) for an amount equal to a fair market value that we reasonably believe we could sell them for, less any actual or estimated liabilities and expenses. c. When we have either sold or transferred all of the assets, we will cancel all of the units in that investment fund. Before we cancel the units, we will calculate the value of all units that remain in that investment fund. We will do this by taking the total amount from the sale or transfer and deducting an amount we estimate covers all outstanding liabilities and expenses. This will give the woundup investment fund value. We will then wind up the investment fund. d. Your share of the wound-up investment fund value will equal the number of units held by you immediately before the investment fund is wound up, divided by the total number of units in that investment fund at that time. We will apply your share of the woundup investment fund value (which will be a percentage of the wound-up investment fund value) to allot units in other investment funds to your policy at the unit price of those investment funds. We will do this in accordance with your instructions. If you do not give us any instructions before the investment fund is wound up, we will allot units in the investment funds we set out in the notice telling you that we are going to wind up the investment fund. Page 18 of 44